Hans Essaadi, the Chief Executive Officer of Nigerian Breweries Plc, expressed concerns about the deepening economic crisis in Nigeria, noting a stark decline in beer consumption among citizens. Speaking during the company’s investor call following the release of its 2023 results, Essaadi painted a sobering picture of the challenges faced by the beverage industry.
Essaadi highlighted the unprecedented nature of the year for Nigerian breweries, attributing a substantial decline in the mainstream lager market to the inability of Nigerian consumers to afford beer after enduring strenuous workdays. The company suffered a staggering N153 billion foreign exchange loss due to the devaluation of the naira for the year ended December 2023.
Despite growing revenue by 8.9 percent to N599.64 billion from N550.64 billion, Nigerian breweries faced significant setbacks. Net finance expenses surged by 449.7 percent to N189.19 billion, resulting in a loss of N106.31 billion, a sharp downturn from a gain of N13.19 billion in 2022.
In their commentary on the financial results, the NB Board of Directors highlighted the tumultuous economic landscape of 2023, marked by currency redesign, cash shortages, high inflation rates exceeding 30 percent, and fuel subsidy removal, exacerbating existing challenges for businesses and individuals nationwide.
Despite these headwinds, the board emphasized the company’s resilience and commitment to navigating the adverse economic conditions. Drawing upon over 77 years of experience operating in Nigeria, Nigerian Breweries pledged to remain forward-thinking, leveraging its diverse portfolio, robust supply chain, and dedicated workforce to drive long-term value creation for shareholders and stakeholders.
Amidst the economic downturn, Nigerian Breweries took proactive measures, including price adjustments in August, to accommodate rising input costs. The devaluation of the naira, resulting from the Central Bank of Nigeria’s harmonization of the foreign currency market, led to forex losses for the company, echoing challenges faced by other sectors.
As the brewing industry grapples with evolving economic dynamics, Nigerian Breweries remains committed to adapting and innovating, despite the prevailing uncertainties, to uphold its legacy as a leading beverage producer in Nigeria.
